Now it's time for questions

First questions: How'd you become comfortable with $1.1 billion? What will the ads look like? What will search look like?

Goldman says the valuation came out of cash-flow analysis, forward EBITDA analysis, enterprise value in terms of monthly active users and unique users versus other transactions, and precedent transactions like Instagram and Yammer.

Mayer says that Yahoo released "Yahoo Stream Ads" in May, which take text ads and put them in the news stream on Yahoo.com. She says you can expect more of that on Tumblr. On Tumblr, there is the dashboard, which is like Facebook's News Feed or inbox. Today, Tumblr does some advertising there. Yahoo would like to "introduce a very light ad load" there. Yahoo also might work with some bloggers who want ads on their blogs. That would only be done with permission.

Yahoo will possibly provide some Web search on Tumblr.

Mayer says Tumblr will help grow engagement on Yahoo media brand pages and will also help grow its search business.

Third questions: When do you think Tumblr will dramatically help Yahoo monetization? Does this signal a change in M&A strategy?

Goldman says revenues will start to materialize "in a major way" in 2014. It will materially contribute to our revenues in 2014 and beyond.

Mayer says Yahoo's talent aquisitions will continue. She says this larger, more strategic acquisition is an exception. The last time Yahoo did an aquisition of this scale was Overture. She says that buys of that scale become a core part of the strategy.

Will Yahoo try to move Tumblr users from Tumblr to Yahoo?

Mayer says that the plan is to let Tumblr be Tumblr. Yahoo may power Tumblr search and get some Tumblr users that way. Yahoo will also link more to Tumblr posts from Yahoo media properties, therefore making those properties more relevant to the types of people who like Tumblr.

How will Yahoo and Tumblr integrate their brands? Will it be clear that Tumblr is a Yahoo site? Will Tumblr logins change to get more data about its users?

Mayer says Tumblr's brand will grow apart from Yahoo. "We want to let Tumblr be Tumblr," she keeps saying. She cites eBay-Paypal and Google-YouTube as other big aquisitions that worked because the brands stayed independent.

Mayer says she and Karp both want online ads to be as good as the content. She says they both wistfully remember ads that were "aspirational" and made you want to buy a car or see a movie.